Technological & Financial Analysis of a Carbohydrate Vaccine for Tuberculosis

Presented by:Melissa Martin

Erica Clemente-Harl

Tuberculosis

Currently:! Leading cause of death in

developing world ! 2 billion infected! 8 million/year - active TB! 3 million/year die! 10-15 million latent in U.S.

Projected:! 37,800,000 of current HIV

patients will become active and die in the U.S.

! New Cases: 1 billion 2020! 36 million deaths from

new infections

Vaccine Needed!

What is Tuberculosis?

! Mycobacterium tuberculosis! Infection by inhalation! Contagious when active! Symptoms: weight loss, fever, appetite

loss, cough, chest pain, bloody sputum! Patients will die within weeks to months

without treatment

New Drugs: Significance

! Drastic effect on population" Lower death rates" Extend life expectancy" Eradicate disease (small pox 1967-73)

! Financial gain! Personal motivations

Romantic view!

New Drugs: Reality

! Average cost over $400 million from research to consumer

! Strictest protocols for drug approval in U.S." Food & Drug Administration" Lengthy and tedious process" average = 15 years" Success rate: 5/5,000 potential drugs

A Researcher�s Concerns

! Will my procedure work?

! How accurate is my theory?

! How can I increase the product yield?

! Can this process be scaled up?

An Investor�s Concerns! Amount to invest in

research? ! How long will it take? ! Risk of losing money?! How much can I lose? ! Expected profit?

! What timeframe? ! Failure at any FDA

Phase? ! Product price?! What is the market?! Advertisement

campaign?

We can provide simultaneous answers to these questions!

Project Overview! Proposal

Carbohydrate- based tuberculosis vaccine

! Acknowledgment of technical uncertainties

! Success estimate

! Two directions" How to develop vaccine" Decisions to be made

Vaccines

! Definition: weakened or killed pathogens or parts of polysaccharides and/or proteins that stimulate immune response

! Benefits of using parts of the organism "Will not cause infection with organism"Stimulates antibody production in body

Antibody Stimulation Goal

! Antigen recognition ! Engulfing! Cell death & degradation! Fragments displayed

on cell surface! Proliferation and

activation of T cells! Antibody circulation

M. Tuberculosis Cell Wall

�Cell growth

�Polysaccharide recovery

�Cleaving

�Conjugation to carrier protein

Bacterial Growth

! Mycobacterium tuberculosis ATCC 25177! Inoculated in Lowenstein-Jensen (LJ)

plates" Generation time = 6 - 8 weeks

! Transfer to LJ liquid medium " Generation Time = 15 hours

! Deviation: growth time

Cell Membrane Separation! Centrifugation

" Pellets: 3,000 x g for 20 min" Wash in phosphate- buffered

saline" Re-suspend in distilled water

! Sonication" Weakening of the cell wall

with electrical pulses" Three cycles of 30 s pulses" Carbohydrate yield: 70-80%

! Centrifugation" 3,000 x g for 20 min

! Supernatant filtration " Separation of the capsule

! Lyophilization (optional)

Deviation: sonication cycles

As presented by Stokes et al., 2004

Cell Membrane Cleaving

! Fragments between 2 and 10 kDa

" Ensures no virulence activity

" High titer response with less than 10 kDa

Acetolysis

! Step 1: Acetolysate" Acetic acid, acetic

anhydride, and sulfuric acid" 8 hrs @ room temp. (RT)" Pour into 30 g ice water

! Step 2: pH stabilization" At RT" pH = 7.5 with NaOH

! Step 3: Sugar acetate extraction" Use chloroform " Yield = 96.3%

! Step 4: Evaporation" Dry over anhydrous sodium

sulfate

Deacetylation

! Step 5: "Methanol, barium methoxide, & Dowex 50

! Step 6: "Sephadex G- 25, eluted at 10 mL/hr

! Step 7: Gel filtration (0.2 µm)

Deviations:

Cleaving, size, yield, and reaction

Carbohydrate Attachment

! Step 1- Amination of polysaccharides (PS)"Deviation: insufficient amino substitution

PS-CHO + NH4Cl # PS-NH2

! Step 2- Thiolation of PS with 2-iminothiolane

PS-NH2 + -NH2+Cl- # PS-NH-C(NH2

+Cl-)-(CH2)3-SHS

NaBH3CN

Carbohydrate Attachment

! Step 3- Bromoacetylation of tetanus toxoid(TT)"Deviation: contamination in tetanus sample

TT-NH2 + NHS-CO-CH2-Br # TT-NH-CO-CH2-Br

As presented by Pawlowski, et al, 1999

Carbohydrate Attachment

! Step 4- Conjugation activated PS and TT"Deviation: incomplete conjugation

Step 2 product + Step 3 product #TT-NH-CO-CH2-S-(CH2)3-C(NH2

+Cl-)-NH-PS

! Step 5- Separation:product from free reactants"Deviation: contaminants, pH variation

Research and Pre-FDA

! Laboratory research"Create the vaccine" Improve the product yield "Create the deliverable drug

! Animal testing"Test biological activity and safety

FDA Approval Process

! Phase I" Metabolic and

pharmacologic effects in humans

" Dosing effects" Effectiveness

! Phase II" Effectiveness of the drug " Short-term side effects " Health risks

! Phase III" Overall benefit-risk

relationship

! Applications and Committees

! Conditions of Failure" Design failure in research" Clinical hold in FDA

What do technical deviations mean in

???

Goals

! Directed at risk taker, risk averter, or risk average

! Aid with critical decisions" Research and investment" Failed FDA phase

! Market strategies and demand models

! Risk assessment

! Success and profit estimation

Decision- Making! First Stage or �Here and Now� Decisions

" There will be consequences for �things that I do today�

" Example: buying a house

! Second Stage or �Wait and See� Decisions" Made in response to the realization of uncertainty " Need to be addressed, not made" Example: opening an umbrella when it rains

Decision- Making

$ Time to begin plant construction

$ Time to begin marketing campaign

$ Additional research after failed FDA stage

Focus processes in pre-FDA research

$ Protein/ polysaccharide conjugation

$ Capsule cleaving/ recovery$ Bacterial growth

Second Stage DecisionsFirst Stage Decision

Financial Definitions

Market � brings together buyers and sellers

Demand � schedule with various amounts of a product consumers are willing/able to purchase at a price

Risk - uncertainty of project and associated financial loss or gain

Net Present Value (NPV) � how much the project is worth at a point in time; indicative of favorable venture

Market! Diverse target groups

"Melanoma patients in the U.S."Cancer world wide

! Tuberculosis"12 million hospital personnel"1.4 million military personnel

! Depends on resources of investors

Economics

! Definitions: " α = Measurement of

customer knowledge of product

" β = Measurement ofcustomer preference" d1 = Amounts of a

product at a price that consumers are willing to purchase

! Purpose" Price" Return on Investment

(ROI)" Production schedule

)1/(11

12

1

21

21

αβ

βα

−−

−= dPP

PY

PPd

Demand Model

New Product 3.5 times better

d1 = New drug

α = varied

β = 0.29

P2 = $115.09

P1 = $140.00

D = 13.4 million units

Iterative Calculation � 82% Market

Demand Results

0102030405060708090

100

0 1 2 3 4 5Time (years)

Dem

and

(%)

α Function Model

7,250Total

17095 � 100 %4 to 51,52090 � 95 %3 to 42,69070 � 75 %2 to 31,94035 � 40 %1 to 276010 � 15 %0 to 11702 %0

InstallationsVisited

MarketTarget

Year

! Increased with advertisement ! Aggressiveness of marketing campaign

α Function Model

0

0.2

0.4

0.6

0.8

1

0 1 2 3 4 5Range (years)

α

β Parameter

N/AN/A0Currently, only available via injection

Delivery Method

000.05Target institutions, not publicAvailability

0.30.70.3New product has less side effects than existent one

Side Effects

000.05No similar productBrand

β = 0.29β = H2/H1

0.230.77H = Σ(w*yi)β= measurement customer preference

0.20.80.7New product more effective than existent oneEfficacy

Existing Product (y2)

New Product (y1)

Weight(w)DescriptionProperty

Price & Demand Relation

! Higher demand for lower priced product

Demand at Different Prices

0

2

4

6

8

10

12

14

16

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5

Time (years)

$100/unit

$120/unit

$135/unit

$140/unit

$145/unit

$170/unit

$200/unit

Dem

and

(mill

ion

units

)

Profit Results

! Different profits! Depending on α and d1

Cumulative Profit for Different Prices

-200

0

200

400

600

800

1000

1200

1400

1600

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5

Time (years)

$100/unit$120/unit$135/unit$140/unit$145/unit$170/unit$200/unit

Prof

it ($

mill

ions

)

Price Optimization

! Higher NPV preferred! Discounted rates, etc. (later)

NPV as a Function of Price

0100200300400500600700800900

1,000

$100 $120 $135 $140 $145 $170 $200Price ($/unit)

NPV

($m

illio

ns)

Return on Investment

! ROI = Profit/FCI; approx. 3 years! Maximum ROI = 29.08%

ROI Within 5 Year Span for Different Prices

0

5

10

15

20

25

30

35

100 120 135 140 145 170 200Price ($/unit)

RO

I (%

)

Demand and Risk Relation

! Selected values of α, β, price, and demand"α varies with time"β = 0.29"Popt = $140.00"Demand = 13.4 million units

! Risk calculated accordingly

What is Risk?

! Predictor of the product�s success

! A collection of paths that vary with first stage decision"Research time invested: 6, 8, or 10 years

Cumulative Probabilities and Costs

! Pathways"All possibilities considered

"Realistic probability assigned

! Probabilities compounded and costs summed over a particular path

! Risk and net present values calculated

Sample Pathwayck to R&D

Reaction Detection in

Animal Testing

Reaction to Vaccine

Adverse Reaction

Mild, Acceptable Reaction

Satisfactory or No Reaction

Titer Measurements

Insufficient Titer

Booster Administration

Back to R&D

Lower Titer Levels than

BCG Vaccine

High Titer

Same Titer Levels as BCG

VaccineHigh Titer

Back to R&D Vaccine Proceeds!!

70- 80- 90%30- 20- 10%

30- 20- 15% 70- 80- 85%

10- 20- 25%

20- 10- 5% 40- 45- 45% 40- 45- 50%

90- 80- 75%

$1.8 million- $2.6 million -$3.5 million

2- 3- 4 years

0.5 years

$1.3 million- $1.3 million-$2.2 million

1.5- 1.5- 2.5 years

Sample Pathway

$605Net Present Value (millions)

10Time in FDA (years)

6Time in Research (years)

$49.0Cost of Pathway (millions)

0.259%Overall Possibility of Occurrence

ValuesCharacteristics of Example Path

Risk Analysis

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

-$50 $50 $150 $250 $350 $450 $550 $650

Net Present Value (millions)

Prob

abili

ty

6 years 8 years 10 years

This is a very risky project!

What can we do?

FDA: Attempt #2

! Where drug was abandoned before, return to research for one year

! Continue in FDA at same phase

! Expect higher probability of success

Comparison of Risk Analyses

Summary of Pathways in Risk Analysis

23.3%9.2%Percent Success

(6 year path)

9612Successful Pathways

44371Number of Pathways

"Second Chance�Initial

Risk Summary: TB Vaccine

$323.74$428.16$485.97Expected Worth (millions)

47.1%65.3%76.7%RiskRecycleThrough

FDA

$362.56$494.43$555.43Expected Worth (millions)

53.7%78.1%90.8%RiskSingle tripThrough

FDA

10 Years8 Years6 Years

First Stage Decision- Time Invested in Research

Conclusions! 1st stage decision

" 6, 8, or 10 years pre-FDA research

! Price optimization" $140/unit" ROI = 29% (5 years)

! FDA risks based on 1st

stage decision" From 54% to 91%

! Risks based on 2nd stage decision to re-cycle drug" Decreased to 47% to 77%" Decreased Expected Worth

! Pre- FDA research" Significantly increases

success probability" Decreases Expected Worth

General Conclusions! New drug analysis outcome

"General form of pre-FDA research & FDA approval process

"Market analysis"Demand and pricing models"Risk analysis"Expected worth estimation"Assistance in critical decision- making

Tuberculosis Vaccine

Questions?

Appendix

Antibody Stimulation: Goal

! Use parts of Mycobacterium tuberculosis capsule and force the body to create antibodies against it

! Replicate �natural� antibody production process

! Stimulate response for future and current infection

Method Benefits

! Has the highest yield and the most documentation

! Modeled for all saccharide -protein conjugate vaccines

! Researched with Tetanus Toxoid

Antibody Suppression

! Binds to macrophage surface protein (C3b) -receptor for complement cascade" No guidance to site of

infection! Prevents formation of

phagolysosome

TB multiplies inside macrophages

Carbohydrate Attachment

! Step 1- Amination of polysaccharides (PS)"Deviation: insufficient amino substitution

PS-CHO + NH4Cl # PS-NH2

solid sodium cyanoborohydride

PS + solid ammonium chloride # aminated PS

NaBH3CN

Carbohydrate Attachment

! Step 2- Thiolation of aminated polysaccharides with 2-iminothiolane

PS-NH2 + -NH2+Cl- # PS-NH-C(NH2

+Cl-)-(CH2)3-SH

Aminated PS + 2-iminothiolane # thiolated PS

S

Carbohydrate Attachment

! Step 3- Bromoacetylation of tetanus toxoid(TT)"Deviation: contamination in tetanus sample

TT-NH2 + NHS-CO-CH2-Br # TT-NH-CO-CH2-Br

Stock TT + solid N-hydroxysuccinimide ester of bromoacetic acid # bromoacetylated TT

Carbohydrate Attachment

! Step 4- Conjugation of thiolated polysaccharides with bromoacetylated tetanus toxoid"Deviation: incomplete conjugation

PS-NH-C(NH2+Cl-)-(CH2)3-SH + TT-NH-CO-CH2-Br #

TT-NH-CO-CH2-S-(CH2)3-C(NH2+Cl-)-NH-PS

! Step 5- Separation of conjugates from free reactants

! Deviation: contaminants, pH variation

General Technological Risks

! Experimental failure! Unexpected outcomes! Lack of chemical reactivity ! Deviations in product recovery

"Methodology or instrumentation! Unavailability of resources or test subjects! Risk to human health

TB Vaccine Risks & Deviations

! Growth on plates not determined! Non- effective sonication! Yield of cell membrane (pellets) uncertain! Carbohydrate cleaving inaccurate

" Over 10 kDa or less than 2 kDa capsule fragments

" Deacetilation not achieved � lower yield

TB Vaccine Risks & Deviations (cont�d)

! Insufficient amino substitution of polysaccharide! No sulfhydryl groups after reduction of

disulfides! Residual salts and impurities in tetanus toxoid! Incomplete bromoacetylation reaction- no

activated amino group! Incomplete conjugation of polysaccharide and

tetanus toxoid! pH variance at any step! Contamination by free reactants

Vaccine Components

! 25ug polysaccharide- tetanus toxoid conjugate

! Sodium Phosphate Buffer! 0.9% Sodium Chloride Saline

Animal Testing Procedures

! 80 male BALB/c inbred mice injected with complex

! 10 mice injected with saline, 10 with carbohydrates as controls

! Mice immunized subcutaneously at 0 and 28 days with 1 ug of conjugates in 0.25 mL phosphate- buffered physiological saline (PBS)

! Blood samples collected every 7 days for 120-day period

Animal Testing Procedures! Serum titers measured when samples are

sent to testing facility! IgG levels monitored periodically

Business Plan

Competition

Crucell & Aeras Global TB Vaccine Foundation

! Bill & Melissa Gates Foundation $82.9 million to Aeras

! $2.9 million to Crucell! Improve on BCG vaccine! Phase I clinical trials in 5 years + 8 yrs FDA! Earliest distribution Year 2019!

Production Capacity

! Current Market = 2.68 million/year! 3.5% Market Growth - linked to hospitals

& military

-3.00E+06

-2.00E+06

-1.00E+06

0.00E+00

1.00E+06

2.00E+06

3.00E+06

4.00E+06

5.00E+06

6.00E+06

7.00E+06

2016 2017 2018 2019 2020

2 million

3 million

5 million

7 million

10 million

Time (years)

Sur

plus

(dos

es)

α Function Model

$7,672,032.00Total$121,584.00Visits (2 sales reps)4 to 5

$1,094,256.00Visits (18 sales reps)3 to 4

$2,759,984.00Visits + Website + Television (32 sales reps)2 to 3

$2,212,865.00Visits + Website + Television (23 sales reps)1 to 2

$1,361,768.00Visits + Website + Television (9 sales reps)0 to 1

$121,584.00Word of mouth, Presentations, FDA Results, Journals, Visits (2 sales reps)0

ExpensesAdvertisement MethodRange (Years)

! First 3 years � most costly

Advertisement: Methods & Costs

780,000.00Television

• 30 second commercial 3 times/day

2,400.0032,000.00

240.00

World Wide Web• Web Page• Web Master salary• Fee, other

45,000.0013,440.002,352.00

Sales Representative (84 installations)• Salary• Transportation, car, plane tickets• Misc., meals, reimbursements, other

Cost ($/year)Method & Description

Demand Equation

demandscompetitorddemandourd

pricescompetitorppriceourp

productofawarenessSS

d

ddpdp

'

'

2

1

2

1

1

2

2

12211

====

=

=

=

α

β

β

ααβ

αβ

βα

1

1

2

11

1

21

2

112

2211

dpdpY

ppd

pdpYd

dpdpY

⋅

−

=∴

−=⇒

+=

−

Risk Analysis

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

-$50 $50 $150 $250 $350 $450 $550 $650

Net Present Value (millions)

Prob

abili

ty

6 years 8 years 10 years

Detail of Losses

00.10.20.30.40.50.60.70.80.9

1

-$14 -$12 -$10 -$8 -$6 -$4 -$2 $0Net Present Value (millions)

Prob

abili

ty

6 years 8 years 10 years

Timeline: 2nd Stage Decisions

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

ProductionMarketingPlant

ConstructionFDA:

ApplicationsFDA:

Phase IIIFDA:

Phase IIFDA:

Phase IAnimal TestingResearchYear